What did the High Court hold?

The High Court found that the exclusion of the comparables was justified given their scale of operations. The court held that no substantial question of law arose from the ITAT's order.

The Revenue appealed against an ITAT order directing the exclusion of four specific companies from the list of comparables for determining the Arms Length Price (ALP) of international transactions. The ITAT had followed its previous order for an earlier assessment year which was not challenged by the Revenue.

What were the issues?

Whether the ITAT was justified in excluding certain comparables from the list for ALP determination. Whether a substantial question of law arises from the ITAT's order.

PCIT vs Toluna India Pvt .Ltd | Delhi High Court 2016

$~4&5 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 393/2016 PR.COMMISSIONER OF INCOME TAX -09 Appellant Through: Mr. Dileep Shivpuri, Sr. Standing Counsel with Mr. Sanjay Kumar, Advocate. versus TOLUNA INDIA PVT.LTD . Respondent Through: Dr. Rakesh Gupta, Mr. Somil Agarwal, Mr. Rohit Kumar Gupta and Ms. Monika Ghai, Advocates. + ITA 394/2016 PR. COMMISSIONER OF INCOME TAX-09 Appellant Through: Mr. Dileep Shivpuri, Sr. Standing Counsel with Mr. Sanjay Kumar, Advocate. versus TOLUNA INDIA PVT.LTD . Respondent Through: Dr. Rakesh Gupta, Mr. Somil Agarwal, Mr. Rohit Kumar Gupta and Ms. Monika Ghai, Advocates.: CORAM: JUSTICE S. MURALIDHAR JUSTICE NAJMI WAZIRI ORDER % 29.07.2016 CM No. 25181/2016 (Exemption! in ITA 393/2016 1. Allowed subject to all just exceptions. ITA 393/2016 & 394/2016 Page i of 3 Digitally Signed By:AMULYA Signature Not Verified

2/ CM No. 25182/2016 (condonation of delay in re-filing) in ITA 393/2016 I ^TV/I ^1 ^ — 1 <• A -- . CM No. 25183/2016 (condonation of delay in re-filing) in ITA 394/2016 2. For the reasons stated in the applications, the delay in re-filing the appeals is condoned. 3. The applications are allowed. ITA Nos. 393/2016 & 394/2nif^ 4. These are two appeals filed by the Revenue against a common order dated 2 June, 2015 passed by the Income Tax Appellate Tribunal (TTAT') in ITA No. 6407/Del/2012 for the Assessment Year ('AY') 2008-09, and ITA No. 989/Del/20I4 for the AY 2009-10. The Revenue is aggrieved by the ITAT directing the Assessing Officer ('AO') to exclude following four comparables from the list of comparables for the purpose of determination of the Arms Length Price (ALP) of the international transactions involving the Assessee and its Associated Enterprise; (i) Infosys Technologies Ltd; (ii) KALS Information Systems Ltd. (Segmental); (iii) Tata Elxsi Ltd. (Software Development and Services Segment); and (iv) Wipro Ltd. (IT Services Segment). 5. The ITAT, in giving the above direction, has followed the order passed for the earlier AY i.e. 2007-08, which does not appear to have been challenged by the Revenue. On the question of exclusion of the above comparables, the Court finds that given the scale of operations of the above ITA 393/2016 & 394/2016 Page 2 of 3

5 entities, their exclusion from the list of comparables for the puiposes of determination of ALP appears justified. 6. No substantial question of law arises from the impugned order of the ITAT. The appeals are, accordingly, dismissed. s. muraLidhar, j JULY 29, 2016 kk NAJMl/WAZIRI, J ITA 393/2016 & 394/2016 Page 3 of3

PR. COMMISSIONER OF INCOME TAX-08 vs. TOLUNA INDIA PVT .LTD

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